Oil prices rose on Thursday, spurred by rising tension around northern Iraq following the autonomous Kurdistan region’s vote in favor of independence in a referendum.
Brent crude oil was up 60 cents at $58.50 a barrel by 0945 GMT. It hit a more than two-year high of $59.49 on Tuesday after Monday’s referendum vote prompted Turkey to threaten to close the region’s oil pipeline.
U.S. light crude was 60 cents higher at $52.74 after reaching a five-month intra-day high of $52.86 a barrel.
“Kurdistan and Northern Iraq now export 500,000-550,000 barrels per day (bpd). That would be a big loss to the market,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
Iraqi Kurdistan voted overwhelmingly on Monday in favour of independence, prompting Turkish President Tayyip Erdogan to say he could use military force to prevent the formation of an independent Kurdish state and might close the oil “tap”.
Turkey promised on Thursday to deal only with the Iraqi government on crude oil exports, “restricting oil export” operations to Baghdad, the office of Iraqi Prime Minister Haider al-Abadi said.